Should You Buy Shake Shack Stock Before Aug. 5?
Location expansion remains strong, but margins for this restaurant chain deserve close attention.
Overview
Shake Shack (NYSE: SHAK) reports second-quarter earnings on Wednesday, Aug. 5, but if you're long on Shake Shack, you should focus less on whether the company beats estimates and more on whether its growth story remains intact. So far, it does.
In Q1, revenue climbed 14.3% year over year to $366.7 million, while same-store sales increased 4.6%. The company also opened 17 company-operated restaurants and five licensed locations, continuing one of the fastest expansion plans in the fast-casual industry. I've personally seen quite a few at the travel plazas along the New York Thruway. They're becoming about as common as Chick-fil-A and Starbucks.
Details
Expansion hasn't been an issue. But the challenge of profitability is very real. That shouldn't be taken lightly.
Source
Originally published at www.fool.com.